The informal sector is a major, albeit unnoticed, cause of the increase of income inequality throughout the world. This sector promotes inequalities for at least three reasons. First, it increases the share of low-paying jobs. Second, it is characterised by low taxation, which has a modest redistributive impact on the tax system. Third, the lack of labour market and social protection regulations widens the inequalities between formal and informal workers. In order to verify the mechanisms linking the informal sector and income inequality in Morocco, an empirical study was carried out using a lagged autoregressive delay model (ARDL) between 1960 and 2007. Our econometric analysis confirmed the positive empirical link between the informal sector and income inequality. The results reveal that the informal economy widens income inequalities in an already unequal country.